But about half of millennials aren’t saving for retirement at all. Aside from shortchanging their retirements, the slackers are “potentially leaving (free) money on the table” in the form of employer matching contributions, says Kristen Robinson, senior vice president at Fidelity Investments.

Last week’s blog post reported that – according to the Federal Reserve’s 2013 Survey of Consumer Finances – 401(k)/IRA balances for the typical working household approaching retirement declined from $120,000 in 2010 to $111,000 in 2013. This drop is startling given the positive developments between 2010 and 2013 – a recovering economy, strong stock market performance, and the continuing maturation of the 401(k) system.

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An underfunded 401(k) can mean a gloomy retirement.

An even more interesting issue than the decline in reported balances is how much we should expect to see in these 401(k)/IRA accounts. In an attempt to answer that question, we did a simple spreadsheet analysis for a representative individual. This individual was age 29 in 1982 – the first year 401(k)s were available – and reached 60 in 2013. He earned Social Security’s average wage throughout his life and contributed 6% of salary and received a 50% match from his employer. He had a 50/50 stock/bond allocation, and received actual investment returns over the period. (Interestingly, these returns were higher than long-run averages.)

The Federal Reserve has just released the 2013 Survey of Consumer Finances (SCF), a triennial survey of a nationally representative sample of U.S. households, which collects detailed data on their assets, liabilities, and demo­graphic characteristics. It is considered the gold standard of information on income and wealth.

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The Fed depicts gloomy times for retirement savers.

Overall, this year’s report is very discouraging. For American households, both median income and median wealth have declined since 2010.

But retirement is our game, so we turned immediately to combined 401(k)/IRA balances – particularly for those approaching retirement. The great advantage of the SCF is that it provides information not only on 401(k) balances, much of which is available from financial-services firms, but also on household holdings in IRAs. While 401(k) plans serve as the gateway for retirement saving, more than half of the money collected now resides in IRAs. The relevant question is how much do households hold in these two sources combined.

When it comes to Americans’ retirement account balances, happy days are here again—but only for some. Average retirement-account balances have actually shrunk for people at the higher and lower ends of the income scale, while the percentage of Americans who have retirement accounts continued a recent decline.

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It’s half empty; but hey, at least she has a glass.

According to a new report from the Federal Reserve, the average balance in Americans’ retirement accounts—a category that includes Individual Retirement Accounts (IRAs) as well as 401(k)s, 403(b)s and Keogh plans—rose 10% over the past three years, from $183,400 in 2010 to $201,300 in 2013. The median balance, meanwhile, was up 25%, from $47,200 to $59,000. The report looked at families whose “head is between ages 35 and 64”—a group whose members are generally “established in their careers” but are “too young for full retirement.”

If you’re anxious about how you and your finances will fare in retirement, a new study offers a measure of reassurance.

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You can enjoy the beach without owning the beach.

The report – from T. Rowe Price, the mutual-fund company – looked at individuals who had stopped working in the past one to five years and who had a 401(k) plan or an individual retirement account that had been rolled over from a 401(k).

As Tom Lauricella explained this weekend in The Wall Street Journal, the study found that many retirees – even in the face of tight budgets and modest returns on savings – are able to adjust their spending and lifestyles.

Consequently, a large majority of those surveyed – some 90% – said they are “very satisfied” or “somewhat satisfied” with their retirement.

Over the past decade, financial services firms have added new bells and whistles to their “managed accounts,” which offer direction on 401(k) accounts and IRAs on behalf of people who want investment help. Now, a small player is introducing another innovation—offering to make that help a lot cheaper.

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Jousting over your 401(k).

Typically, when a 401(k) investor signs on with a managed account provider, the investor receives a recommendation produced by that company’s software. A new program launched by NextCapital Group of Chicago, will offer advice from various companies with proprietary investment methodologies of their own, including Russell Investments, a global asset manager and consultant to both 401(k) and defined benefit pension plans.

(Full disclosure: NextCapital also powers the “portfolio dashboard” technology available to users of wsj.com, marketwatch.com, and barons.com, who can use the tool to aggregate all of their holdings onto one balance sheet.)

Would-be retirees will soon be able to buy “longevity annuities” for their savings plans. These products can help guard against running out of money in later life – as long as you recognize their shortcomings.

Last Dec. 31 marked the expiration of a popular tax provision that allows owners of individual retirement accounts who are 70½ or older to save on taxes when donating to charity. But a lawyer in the know—in fact, an early and principal proponent of the provision as a volunteer lawyer for charity—says chances are high that Congress will resurrect it after the November election.

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Renewal of an old law could slash retirees’ tax bills.

The extension, says Conrad Teitell, an attorney at Cummings & Lockwood in Stamford, Conn., is likely to be retroactive for 2014 and could occur “at the 11th hour.” All of which is not surprising, given the fact that Congress has reinstated this provision several times in the past—each time, making the provision retroactive.

The best part: In the House-passed version—which has bipartisan support—the “tax-free distributions from IRAs for charitable purposes would be made permanent,” according to Teitell’s “Taxwise Giving” newsletter. The bill would also allow donors to deduct gifts made by April 15 of the following tax year on the prior year’s tax returns, Teitell writes.

Are Americans getting more serious about saving for retirement? Data released by Fidelity Investments today suggests that the answer could be yes.

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IRA savers are building up their stashes.

Among investors who hold individual retirement accounts at Fidelity and contributed to those accounts in 2013, the average contribution was $4,150 —a record high level that’s up 5.7% from 2012.

Thanks in part to the rising stock market, the average account balance among all 7 million IRAs at Fidelity rose 10% to $89,100 – also a record high.

Older investors closer to retirement aren’t the only ones getting religion about saving. While investors in their 50s, 60s, and 70s raised their 2013 IRA contribution levels by an average of 5.6%, 5.8% and 7.1%, respectively—contribution rates increased among all age groups, according to Fidelity. Younger investors—in their 20s, 30s, and 40s—increased their contribution rates by 3.9%, 6.7% and 6.2%, respectively.

For some people, finding the discipline to budget and save for retirement is the hardest part of amassing a nest egg. But for others, the challenge is one of financial literacy: They don’t understand how financial and economic concepts like compounding, inflation and risk diversification affect the performance of their investments. Folks in this group may save a lot, but they don’t necessarily save well.

As part of their research, the designers have put together a baseline financial-literacy quiz. MarketWatch readers, who we like to think are above average in their financial sophistication, probably won’t be surprised to learn that their fellow citizens haven’t scored so well on the test.

About Encore

Encore looks at the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities, needs and priorities of people saving for and living in retirement. Our lead blogger is editor Matthew Heimer, and frequent contributors include editor Amy Hoak, writer Catey Hill, and MarketWatch columnists Elizabeth O’Brien, Robert Powell and Andrea Coombes. Encore also features regular commentary from The Wall Street Journal retirement columnists Glenn Ruffenach and Anne Tergesen and the Director of the Center for Retirement Research at Boston College, Alicia H. Munnell.